Utilities see distributed energy gaining investment traction and playing a central role in creating the new grid, according to a new survey of 700 utilities by Black and Veatch
When asked to identify the flow of capital for generation, 68% of those surveyed see distributed energy resources gaining much more investment (29%) or somewhat more (39%) over the next five years.
The only two resources they expect to see garner greater investment are energy storage and solar (ground mount or rooftop) — both of which can be DERs depending on where they are connected to the grid.
A lot of $ flowing to DERS, not so much nuclear
One surprise from the survey was how low nuclear power ranked on the list. Despite the ongoing hype surrounding small nuclear reactors, investment remains nascent in the eyes of utilities. Only 13% of the utilities surveyed see a significant rise in investment today, and 27% expect somewhat more in the next five years.
The survey also identified DERS as driving grid modernization. More than half of the utilities said it’s doing so now or will do so over the next three years.
Despite the speed of DER growth, utilities don’t seem too worried about interconnecting DERs to their system. They ranked distributed energy integration a lowly 11th on a list of challenging issues. Renewable integration, aging infrastructure and environmental regulations pose bigger concerns.
Utilities are stymied about the future — 45% say they have no confidence or little confidence in forecasting data center loads.
Data center growth: How fast is fast?
A sign of the times is how often utilities update their integrated resource plans. It used to be done every five to ten years, but now many utilities refresh them annually. As massive load requests come in from data centers, utilities have “their hands full,” says Black & Veatch in the report. Utilities are stymied about the future — 45% say they have no confidence or little confidence in forecasting data center loads.
“Industry professionals say the load requests often are wide-ranging and have an uncertain timeline — other than fast,” says the report.
Data centers aren’t patient. And they are willing to turn to the open market to buy or build power themselves. This need for speed does not bode well for utilities that must undertake the typically arduous and slow task of getting state regulatory approval before building.
“Clearly, data center appetite and demand for power exceeds what utilities can currently provide, both from a capacity and transmission standpoint. In most cases, what the data center industry is asking for doesn’t exist — it needs to be built,” the report says.
For this reason, some players are pushing for data centers to build DERs and onsite power. (See our related story: Data Centers as Energy Makers, Not Takers?)
Subscribe to the free Energy Changemakers Newsletter, about all things distributed energy.